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We’re a respected and trusted insurance broker and work with a range of different customers. We therefore feel that we are well placed to provide helpful insight into the Insurance industry and all the latest regulatory news. Read all the latest insights below.

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Insurance insights

Terrorism Cover or Not?

Although the threat of the IRA has receded, 9/11 highlighted a new threat which resulted in insurers paying out over £30bn in claims. Following on from this event the world wide insurance market withdrew terrorism cover as standard, and it is now only available to buy at an extra cost in respect of commercial property insurance, which relates to blocks of apartments.

Why Purchase Terrorism Cover?

The bomb attacks in London brought the issue to the fore again as the previous period of non-activity by the IRA had lessened the demand for this cover. It is therefore prudent for all property owners to give very serious consideration to this cover.

The current position is that policies covering property exclude all loss or damage caused as a result of terrorism. This covers acts committed for political, religious, ideological or similar purposes and includes actions by individuals or groups. We have mentioned obvious high profile groups such as the IRA or Al-Qaeda, but other groups such as Animal Rights also needs to be in our sphere of thinking.

Additionally you may find terrorism cover is a requirement of your lease or mortgage provider. It has been upheld in a court appeal in July 2014 that if an insurance clause in your lease requires that explosion cover is required then this should include terrorism.

The likelihood of a terrorist attack may seem small to you but if the unthinkable occurs and you are uninsured your losses could be massive.

My Property Is Not Exposed To Terrorist Attack!

It has been widely accepted that commercial premises in any of our major cities would be considered a high risk and therefore the cost of cover is reflected accordingly. It follows that it would be understandable that businesses or landlords with property outside of these major centres would consider themselves “low risk” and therefore decide not to purchase terrorism cover.

As our cities, roads, rail networks and airports become more secure, terrorist groups will be seeking to target other avenues of disruption in areas of perceived lower risk. The cost of terrorism insurance remains relatively low in these areas, it is prudent to be cautious and not expose your asset.

We mentioned earlier that terrorist activity can be undertaken by individuals as well as groups and this is now much more evident. It is therefore possible these individuals are residing in relative anonymity almost anywhere in the UK. The potential for them to explode a device by accident either inside their home or close to it is therefore evident and this could endanger your property.

In Conclusion

We would urge any landlord or property manager to consider this cover in light of the comments made above. Perceived risk may not always be in line with actual risk.

If terrorism cover is not in force, the resultant damage from usual perils on your buildings policy, such as fire or explosion, would be excluded if caused as a result of a terrorist act. The threat to the UK from various global organisations is ever changing and we would advise careful consideration at each renewal of your policy.